Since the early 1960s, Korea’s rapid development has bred rapid urbanisation, generating one of the most territorially concentrated economies in the OECD. The capital region - Seoul, Gyeonggi-do and Incheon - accounts for roughly one-half of the country’s population and GDP. Among the biggest 90 metropolitan areas in OECD countries, the Seoul Metropolitan Area has the largest share of the national population, the third largest share of GDP (after Dublin and Athens), and the largest share of national patents. Taken together, Seoul, Busan and Daegu account for 70% of Korea’s GDP.

Though Korea’s large cities are flourishing, its territorial development is unbalanced. In rural areas and small cities the population is actually falling. In addition, these areas do not have the same pool of skilled workers found in large cities, which further hinders their competitiveness.

“Urban policies must be coherent with sectoral and structural policies in order to boost productivity and respond to ageing, inequality and environmental pressures”, Mr. Gurría added.

Good urban policies can help unlock the growth potential of Korean cities and address the problems that such growth can create. Seoul now emits 18 times more air pollution per square kilometre than the rest of the country and traffic hampers productivity growth. Urban policies also have a critical role to play in addressing other challenges. Boosting innovation, for example, will require stimulating knowledge creation in medium-sized cities, and urban infrastructure policies can respond to the needs of ageing populations.

The Urban Policy Review of Korea recommends a National Urban Strategy that would:

Tailor urban policy to the needs and strengths of different cities. Unlike Seoul, Busan or Ulsan, promoting growth in lagging cities calls for integrating urban renewal, infrastructure development and job creation policies that are tailored specifically to these cities.

Address Korea’s demographic challenges. Korea’s ‘super-aged society’ will best be accommodated in denser, more accessible urban environments, with land-use and transport policies geared to their needs.

Promote effective governance. The Strategy should pull together the fragmented mandates across the key range of central ministries. It should also close co-ordination gaps across government in urban areas and between municipal authorities operating within a single functional metropolitan area.

Recognizing Korea’s lead in shaping the international green-growth agenda, the review has a special chapter assessing the implementation of the country’s green growth strategy in urban areas. It proposes specific actions such as further greening urban transport and housing using market-based instruments. It also recommends taking a more integrated approach to transportation and land-use planning, for instance by promoting compact transit-oriented development strategies in Korea’s metropolitan areas.